Out of the frying pan, into the fire: Avoiding defamation claims

After an employee’s termination, employers are often confronted with the difficult task of deciding what to communicate and to whom. Should a companywide e-mail be sent to ensure morale and quiet rumors? What if a former employee’s prospective employer calls asking for a reference? Although Wisconsin courts recognize a conditional privilege that protects some communications, it isn’t absolute, and an employer can fall into liability for a defamation claim if not careful.

When defamation follows termination

Deciding to terminate an employee’s employment often is a difficult decision made after a series of events over a period of time. Once the decision to discharge an employee has been made and the employee has been informed, employers are then confronted with the task of deciding what should be communicated and to whom.

Employers may fear that the termination from employment may give rise to tort claims based on defamation, for example, when communicating to other employees about the termination or when providing reference to another employer. How can an employer avoid jumping out of the frying pan and into the fire?

Defamation in general

Defamation is generally comprised of three elements: